City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: April 14, 2025
Report #:2502-4214
TITLE
Approval of Professional Services Contract No. C25191690 with InfoSend in an Amount Not to Exceed $2,344,573 to Provide Utilities Bill Print and Mailing Services for a Term of Five Years; CEQA Status - Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or designee to execute Contract No. C25191690 (Attachment A) with InfoSend for integrated bill printing, mailing, archiving, disaster recovery services, utility bill redesign, and the implementation of electronic bill presentment for a term of five years and a total not-to-exceed amount of $2,344,573, including $2,131,430 for basic services and $213,143 for additional services.
EXECUTIVE SUMMARY
The City’s current bill print system, managed through Pitney Bowes, has become outdated, limiting both operational efficiency and scalability. The existing system only generates bills in a printable format, leaving the Utilities Department, in partnership with Administrative Services and Information Technology, to manage the printing, sorting, and mailing process in-house.
This manual process is time-consuming, resource-intensive, and prone to errors involving significant resources. The proposed contract will enable the Utilities Department to modernize its billing processes, enhance bill design, improve operational efficiency, and provides disaster recovery. Approving this contract will modernize utility billing, reduce long-term costs, and align with the City of Palo Alto Utilities (CPAU) strategic goals for operational efficiency and customer service improvements.
Approximately 50% of the contract cost is directly related to postage. To the extent customers move to paperless bills, actual costs under this contract will reduce. The City is taking a multi- prong approach to reduce the number of physical bills and associated postage costs. Since 2023, the number of paperless only customers has almost doubled from 5,100 to 9,725 due to the new default paperless only setting for new customer registration in the utilities customer
account portal MyCPAU. The City is working on another campaign to convert the remaining 14,000 electronic bill customers who are also receiving a physical bill to paperless only.
BACKGROUND
CPAU oversees the invoicing of approximately 27,500 monthly residential and 3,000 commercial accounts for vital services including electric, natural gas, water, wastewater, storm water, and refuse services. This equates to the generation of over 31,000 utility bill statements each month, with the residential accounts comprising approximately 85% of the total volume and commercial accounts constituting the remaining 15%. In addition to routine billing, CPAU also manages the dispatch of delinquency notices to address outstanding accounts. At present, CPAU relies on SAP CRM 7.0 CIS/Billing software in conjunction with Pitney Bowes EngageOne Communication Suite for the execution of the bill printing operations. Customer interaction with the billing statements is facilitated through the Smart Energy Water (SEW) MyCPAU portal, offering features such as historical consumption review, paperless bill enrollment, and online payment capabilities. The billing workflow entails the extraction of data from Customer Information System (CIS) into printable files, which serves as the foundation for bill creation.
The City often includes “inserts” with bills and/or renewal notices.
ANALYSIS
The proposals were evaluated based on the following criteria. It was also specified that the weights associated with the criteria would be different for the various components of the RFP.
1. Quality and completeness of Proposal
2. Quality, performance and effectiveness of the solution, goods and/or services to be provided by the Proposer
3. Proposer experience, including the experience of staff to be assigned to the project, the engagements of similar scope and complexity
4. Cost to the City
5. Proposer’s financial condition and stability
6. Proposer’s ability to perform the work within the time specified
7. Proposer’s prior record of performance with City or other local, county or state agency
8. Proposer’s ability to provide future maintenance, repairs parts and/or services
9. Proposer’s compliance with applicable laws, regulations, policies (including City Council policies), guidelines and orders governing prior or existing contracts performed by the contractor
InfoSend was deemed the lowest cost proposal and scored the highest overall points for the Bill Print and Mailing service evaluation. InfoSend is a proven provider of over 28 years of experience specializing in supporting 650+ utility clients nationwide. InfoSend also has experience in transitioning over 170 public agencies from their in-house printing to InfoSend.
Key attributes that made InfoSend standout as the selected provider include:
•InfoSend is CIS agnostic and has interfaced with more than 50 different CIS platforms, including SAP.
•Supports application programing interface to CPAU’s online portal by Smart Energy Water (SEW).
•Operates five regional production facilities to ensure with CPAU’s disaster recovery requirements.
•Manufactures and supplies required envelopes and paper stock to mitigate supply chain issues, therefore reducing material costs.
Key benefits of the contract include:
•Ensuring compliance with industry standards and regulations for utility billing. •Reducing the internal workload by outsourcing print, mail, and data management functions.
•Handling over 31,000 monthly bill statements and bill inserts, ensuring accurate and timely delivery for both residential and commercial customers. •Introducing a redesigned utility bill that enhances communication, improving readability, and integrating digital billing options.
•Addressing future scalability by transitioning the department towards automation and smart meter integration.
•Providing disaster recovery, data security, and business continuity features to mitigate risks and ensure uninterrupted services.
It will take approximately twelve weeks to implement the transition of the bill printing and mailing from the City’s in-house services to InfoSend depending on availability of City staff and InfoSend resources for data conversion, interface development, system integration, and testing.
The proposal bid range came in between $460,931- $1,428,810 which included specific tasks.
InfoSend was the lowest cost proposal and was awarded the contract. Staff negotiated additional and optional tasks including postage, postage deposit, archiving and storage, bill redesign, and bill inserts.
Summary of Solicitation Process
Proposal Description RFP 191690
Proposed Description Utilities Bill Print
Proposed length of project 60 months
Number of Vendors Notified 3145
Numbers of proposal packages downloaded 26
Total Days to respond to proposal 21 Calendar Days
Number of Proposals Received 3 but 1 deemed nonresponsive Proposal Bid Range1 for Contract $460,931 - $1,428,810 (annually) Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto- ca/projects/104489
FISCAL/RESOURCE IMPACT
This recommendation has no financial impact for Fiscal Year 2025 as the Utilities Department will continue to use the current bill print system during the twelve-week implementation process for InfoSend. Funding previously collected in the Technology Fund for utility bill printing system replacement will be used to cover the costs of implementation. Given the twelve week implementation timeline, funding adjustments for this contract will be subject to City Council approval as part of the annual budget process. The InfoSend costs will be broken down as shown in Table 1 across the five-year contract period:
Table 1: InfoSend Contract
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total
Utility Printing $87,700 $89,835 $92,083 $94,416 $96,897 $460,931 Postage $180,150 $198,165 $217,982 $239,780 $263,758 $1,099,834 Post-Award
Negotiated Services $54,040 $10,238 $10,749 $11,287 $11,852 $98,166 Bill Inserts $94,500 $94,500 $94,500 $94,500 $94,500 $472,500 Additional Services $41,639 $39,274 $41,531 $43,998 $46,701 $213,143 Total $458,029 $432,011 $456,845 $483,980 $513,708 $2,344,573 The Utilities Department spends approximately $660,000 annually for bill printing and mailing services. These costs are currently paid to the internal service funds: Printing and Mailing Fund ($530,000) and Technology Fund ($130,000). Approximately $200,000 in annual savings is anticipated once this new contract is implemented offset by remaining services from the Printing & Mail services adhoc. The Utilities Department will continue to rely on the Printing and Mailing services for non-scheduled and one-time print jobs such as Proposition 218 rate notices, water quality reports, late and disconnection notices, and customer letters.
The utility bill printing and bill insert costs under InfoSend are comparable to the charges from the City’s internal Technology and Printing and Mailing Funds. The InfoSend contract provides new services such as disaster recovery, bill redesign, and technical support. The contract also frees up staff time in IT, Printing and Mailing, and Utilities to perform more valued added work than printing, sorting, and mailing bills.
1 Proposal Bid Range does not include U.S. Postage and bill inserts costs
STAKEHOLDER ENGAGEMENT
The Bill Print Project involves a collaborative effort among several key departments to ensure successful project execution and integration with existing systems. The Utilities Customer Service department will serve as the lead department, overseeing the project’s coordination and aligning it with the department’s operational needs.
Key stakeholders include:
1. IT Department: The IT team plays a critical role in ensuring seamless integration of the new bill print system with the existing billing infrastructure. They are responsible for addressing any technical compatibility issues and ensuring data integrity during the transition.
2. Utilities Billing Group: This group is responsible for ensuring the new bill print solution complies with all technical and regulatory requirements related to billing formats, accuracy, and consistency. Their involvement guarantees that the project meets both internal and external standards.
3. Communications Group: The Communications team is tasked with overseeing the production of the utility bill inserts, ensuring that all materials meet guidelines, compliance requirements, and effective communication standards for customers.
4. Administrative Services: To ensure that transition and continuity of service through go live, the Print & Mail Shop will continue to mail the City’s utility bills and the Treasury Division will ensures continuity of lockbox services through the transition by coordinating with the City’s lockbox service provider and ensuring that the correct bill specifications are in place so that deposits are correctly received and recorded.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the procurement of the bill printing and mailing services is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).
ATTACHMENTS
Attachment A: Contract with Infosend; Contract C25191690 APPROVED BY:
Kiely Nose, Interim Director of Utilities
Staff: Anthony Enerio, Utilities Manager of Credit and Collections